Goza v. Memphis Light Gas and Water Division

ORDER AND OPINION AND ORDER DENYING LEAVE TO AMEND
PLEADINGS TO CONFORM WITH THE EVIDENCE

JON P.
McCALLA UNITED STATES DISTRICT JUDGE.

This
matter came before the Court for a nonjury trial from
February 25 to February 27, 2019. (ECF Nos. 99-101;
see O. Granting Mot. Strike, ECF No. 91.) Plaintiff
Michael Goza alleges that Defendant Memphis Light, Gas and
Water Division (“MLGW” or the
“Division”) discriminated against him on the
basis of his protected speech and on the basis of his race
when it demoted and terminated him in October, 2017.
(Pretrial O., ECF No. 98 at PageID 1491.) For the reasons set
forth below, the Court finds that Goza succeeds on both
claims.

The
government does not have to turn a blind eye to the speech of
its employees, but MLGW's decisions in this case were
based on unconstitutional factors. As the Court explains
below, the proof at trial showed that MLGW did not actually
believe that Goza would hurt customers or treat anyone
unfairly on account of their race. Instead, the Court finds
that MLGW fired Goza because he expressed unpopular opinions
and created a perception problem for the Division.

Public
perception alone cannot justify a restriction on free speech
- the First Amendment, after all, restricts the government
even though the government is chosen by the people.
See Don Herzog, The Kerr Principle, State
Action, and Legal Rights, 105 Mich. L. Rev. 1 (2006)
(“Ordinarily, the state should do what citizens
want… But sometimes the law bars that
responsiveness.”). Some of Goza's statements may
have been insensitive, offensive, and even bigoted, but they
were protected by the Constitution nonetheless. MLGW thus
violated Goza's First Amendment rights when it demoted
and fired him.

The
Court also finds that MLGW terminated Goza in part because of
his race. MLGW decisionmakers explicitly mentioned Goza's
race as a reason for his termination. MLGW also acted
differently in the case of Deandre Stewart, a similarly
situated African-American employee, who received only a
three-day suspension after he advocated killing
Asian-Americans because of their race. MLGW then took the
unusual step of directing a subordinate to write a report
with the implicit goal of exonerating Stewart and downplaying
his remarks. The Court finds this to be an affirmative
attempt to undermine the even-handed application of MLGW
policy. The Court considers this to be particularly strong
evidence that MLGW's policies as applied to Goza were a
pretext for discrimination.

I.
Background

Michael
Goza worked as a Customer Service Tech III (a “Tech
III”) for MLGW, a division of the City of Memphis and
the utility provider for electricity, gas, and water service
for Memphis and Shelby County. (Pl.'s Resp. Def.'s
Statement of Material Facts, ECF 45-1 at 585-86.) Goza's
responsibilities included investigating and repairing
problems with utility services in customers' homes.
(Id. at 586.) Over thirty-two years of employment,
Goza received customer compliments and good reviews but no
customer complaints. (Def.'s Resp. Pl.'s Statement of
Material Facts, ECF No. 48-1 at 803-804.)

On
August 15, 2017, protesters gathered to support the removal
of a statue of Jefferson Davis from a public park in Memphis.
(Trial Exhibits 6, 7.) Goza did not have work that day and
attended the rally to voice his opposition to the removal
efforts. (Id.; Testimony of Michael Goza, ECF No.
115 at PageID 2149.) Footage of Goza appeared on the nightly
news and some statements he made at the protest were reported
in The Commercial Appeal the next day. (Trial
Exhibits 6, 7.) The Commercial Appeal quoted Goza as
saying, “What I'm tired of is being portrayed as
KKK or a white supremacist simply because I'm a white guy
who wants to preserve my heritage.” (Trial Exhibit 7.)

On
Facebook, Goza had made the following statements before the
August 15, 2017 rally:

Lincoln himself wanted to send all of you back to Africa.
Segregation? That's a whole other topic. What has it
accomplished other than to cause more division between the
whites and blacks. You want to be with your kind. I want to
be with mine. Blacks make up 13% of the population, but yet
are responsible for almost 80% of violent crime. Every city
that's a third world crap whole [sic] is a majority black
and ran by blacks. I could not agree more about what the
federal government has done to blacks however. They're my
enemy. I look at them as an enemy of Christianity. Planned
Parenthood is defended by democrats mostly, but yet has
murdered more blacks than all violent crime combined. I agree
on the war on drugs. Its been used as an excuse to destroy
our liberty while the government ships the drugs into our
country and profits from it. Why else do you think that
Heroin is epidemic while our troops guard the poppy fields in
Afghanistan? So we may not agree on the South, but we can
sure agree on the criminality of the federal government.

(Trial Exhibit 2.)

You want to be with your kind. I want to be with mine,
There's no wrong it that. You celebrate your history, but
you want to destroy mine. You have black history month, but
being proud of white history is racist. That's the
hypocrisy I will never be at peace with. I work the streets
of Memphis daily. The real racists are blacks. 90% of the
blacks who are murdered are done so at the hands of other
blacks. So if black lives matter, why don't you clean up
your own damn house before complaining about my history and
blaming your problems on whitey.

(Id.) When an individual on Facebook stated,
“Signing won't do shit. Until Southern supporters
get to the streets and riot like the ones pushing for
removal. Eye for an[] eye, ” Goza replied:

I couldn't agree more. We at the League of the South are
doing much more. We are getting in the streets. New Orleans
was only a beginning. Charlottesville is this weekend and
over a thousand [are] planning on going. We're planning
these all over South. The attacks have awakened more and
more.

(Id.)

Goza's
appearance at the rally attracted the attention of
individuals who began to investigate Goza's social media
activity. (See generally Trial Exhibit 5.) At some
point, these persons learned that Goza worked for MLGW,
perhaps because other MLGW employees told them or perhaps
because one of Goza's Facebook pictures shows him in an
MLGW truck. (See Trial Exhibit 2, Trial Exhibit 5.)
One complaint about Goza's employment was shared
twenty-one times on Facebook. (Trial Exhibit 5.) Stacey
Greenberg, MLGW Community Relations Coordinator, testified
that another post had been shared eighty-one times, although
she was unable to produce documentation supporting her
assertion at trial. (See Testimony of Stacey
Greenberg, ECF No. 116 at PageID 2217.) Ten customers
submitted complaints to MLGW about Goza, but MLGW received no
complaints after August 29, 2017. (Id. at PageID
2224.)

Goza's
appearance at the rally and his social media statements came
to MLGW's attention as early as August 17, 2017. (Trial
Exhibit 1.) Richard Thompson, an MLGW Senior Communications
Specialist, wrote in an August 17 email to Gale Carson, Vice
President of Communications, that “There is a vibrant
movement to ‘out' employees who are posting racist
memes, etc. on social media. Stacey [Greenberg] and I have
encountered posts from folks who come to our FB page to
inform us because these employees self-identify themselves on
FB. This hasn't turned into a story yet but it's only
a matter of time.” (Id.) On August 18, Carson
forwarded this email and the Facebook picture of Goza in an
MLGW truck to: MLGW CEO and President Jerry Collins, MLGW
General Counsel and Vice President Cheryl Patterson, Vice
President of Customer Services Christopher Bieber, Vice
President of Construction and Maintenance Nicholas Newman,
and Vice President of Human Resources Von Goodloe. (Trial
Exhibit 43.) Collins directed Goodloe to conduct a human
resources investigation, and Goodloe in turn delegated this
task to Virginia Leonard, the Acting Manager of Employment
Services. (Trial Exhibit 1; Testimony of Virginia Leonard,
ECF No. 114 at PageID 1670.) Leonard began her investigation
on August 18, 2017. (Testimony of Virginia Leonard, ECF No.
114 at PageID 1677.)

Goza
resumed work on August 17, 2017, two days after the Jefferson
Davis protest, and worked without incident until August 21,
2017, when MLGW suspended him. (Testimony of Virginia
Leonard, ECF No. 114 at PageID 1758; Pretrial O., ECF No. 98
at PageID 1506.) By August 21, MLGW had decided that Goza
would be moved to a position in which he would not have any
potential contact with customers, despite, at that time,
being unable to articulate an MLGW policy that Goza had
violated. (See Pl.'s Resp. Def.'s Statement
of Material Facts, ECF 45-1 at 585-86; see also
Testimony of Virginia Leonard, ECF No. 114 at PageID 1692;
and see Emails, Trial Exhibit 31 (offering
Collins's opinion that Goza should be removed from all
customer contact).) On September 8, 2017, MLGW offered Goza
the choice of working as a Material Handler or being
terminated. (Pretrial O., ECF No. 98 at PageID 1506.) The
Material Handler position had a twenty-two percent lower
hourly pay rate than Goza's Tech III position and offered
far less potential for overtime pay. (Id.) Under
MLGW's offer, Goza would be forever unable to bid for any
position that had any potential for customer contact.
(Id.) At trial, Goza testified that, after
accounting for lost overtime, the demotion would constitute a
fifty percent pay cut. (Testimony of Michael Goza, ECF No.
116 at PageID 2165.) Goza refused the Material Handler
position on September 22, 2017 and was terminated on October
3, 2017. (Pretrial O., ECF No. 98 at PageID 1506.)

Goza
filed this lawsuit on December 1, 2017. (Complaint, ECF No.
1.) He alleges that MLGW violated his right to free speech
when it took disciplinary action against him. (Id.
at PageID 5-6.) Goza also claims that MLGW fired him because
he is white. (Id.) Goza pursues these claims under
42 U.S.C. §§ 1981 and 1983, which allow individuals
to sue government actors for violations of civil rights.
(Complaint, ECF No. 1.) Goza asks for reinstatement as a
Customer Service Tech III, for backpay and lost benefits, and
for compensatory damages. (Id. at PageID 6-7;
Pl.'s Post-Trial Mem., ECF No. 107 at PageID 1579-80.)

“[P]olicy
or custom does not have to be written law; it can be created
‘by those whose edicts or acts may fairly be said to
represent official policy.'” Paige v.
Coyner, 614 F.3d 273, 284 (6th Cir. 2010) (quoting
Monell, 436 U.S. at 694 and citing Pembaur v.
City of Cincinnati, 475 U.S. 469, 483 (1986)). The Sixth
Circuit has held that:

A municipality can also be held liable for a single decision
by a policymaker if the official is the one who has the final
authority to establish municipal policy with respect to the
action ordered. Similarly, a municipality can be liable for a
decision made by a subordinate if the decision was ratified
by a final policymaker. However, mere acquiescence in a
single discretionary decision by a subordinate is not
sufficient to show ratification.

Arnold v. City of Columbus, 515 Fed.Appx. 524, 538
(6th Cir. 2013) (internal citations and quotation marks
omitted) (quoting Feliciano v. City of Cleveland,
988 F.2d 649, 655 (6th Cir. 1993)). “Whether an
official has final policy making authority is a question of
state and local law.” O'Brien v. City of Grand
Rapids, 23 F.3d 990, 1001 (6th Cir. 1994).

B.
Discussion

As a
division of the City of Memphis, MLGW is a municipal
defendant and may therefore be liable in this case only if
its actions were the result of a custom, policy, or practice.
Monell, 436 U.S. at 691. (Pl.'s Resp. Def.'s
Statement of Material Facts, ECF 45-1 at 585-86.) MLGW argues
that no custom, policy, or practice caused Goza's
termination in this case. (ECF No. 112 at PageID 1595-96.)
MLGW further claims that even if the decisions at issue in
this case were “made or supported” by MLGW
President Collins and Vice President of Human Resources
Goodloe, they are not attributable to MLGW itself as a
government entity. (Id. at PageID 1599.)

1.
MLGW CEO and President Collins had the power to
discipline employees

MLGW
claims that its policies do not allow Collins or Goodloe to
make final and unreviewable employment decisions. (ECF No.
112 at PageID 1599.) See Arnold, 515 Fed.Appx. at
538. Instead, MLGW argues that the Board of Directors
“with the powers granted to it by the City
Charter” established a grievance resolution process as
part of a Memorandum of Understanding between MLGW and its
labor union. (ECF No. 112 at PageID 1599.) MLGW claims that
in doing so “the Board created a custom” under
which MLGW's employment decisions would not be final
until the conclusion of this grievance process.
(Id.)

“A
federal court would not be justified in assuming that
municipal policymaking authority lies somewhere other than
where the applicable law purports to put it.” City
of St. Louis v. Praprotnik, 485 U.S. 112, 126 (1988). To
determine whether the law delegates final and unreviewable
authority to Collins, the Court considers the City Charter
and the Memorandum of Understanding. The Court need not
consider testimony regarding MLGW employees'
understanding of who the final decisionmaker is. See
Id. (“[A] a federal court would not be justified
in assuming that municipal policymaking authority lies
somewhere other than where the applicable law purports to put
it. And certainly there can be no justification for giving a
jury the discretion to determine which officials are high
enough in the government that their actions can be said to
represent a decision of the government itself.”)
(See ECF No. 112 at PageID 1597, 1599.)

The
Article of the City Charter that establishes MLGW also
charges the MLGW President, “subject to the regulations
of the board of Light, Gas and Water Commissioners, ”
with the duty of “general supervision over the
operation of said light, gas and water division and of all
officers and employees of said light, gas and water
division.” Memphis City Charter, Part I, Art. 65,
§ 672. The Charter also requires that “the powers
hereby granted, ” including the powers granted to the
President, “be liberally construed to effectuate the
purposes hereof.” Id. at § 699.
“Liberally construed, ” the President's power
of general supervision over employees includes the authority
to make final disciplinary decisions. See id. at
§ 672, 699. Although the President is required to make
regular reports to the Board of Commissioners, the City
Charter does not require that the Board ratify, review or
approve individual operational decisions. Id. at
§ 672. The City Charter empowers the President to make
municipal policy related to employee supervision and
discipline. See Feliciano, 988 F.2d at 655;
Pusey v. City of Youngstown, 11 F.3d 652, 659 (6th
Cir.1993).

MLGW
argues that the President's powers as set out by the
Charter are subject to the Board's “exclusive
authority to engage, determine the number of, and fix the
duties and salaries of all employees.” (Mem. of
Understanding, Trial Exhibit 48 at 4.) MLGW claims that the
Board exercised this authority when it entered into the
Memorandum of Understanding with its labor union. (ECF No.
112 at PageID 1599.) MLGW contends that Collin's
decisions are not municipal policy, because under the
Memorandum the President's decisions are subject to
review through a grievance resolution process. (Id.)

MLGW
asks the Court to apply the Supreme Court's reasoning in
Praprotnik, 485 U.S. at 126, as the Court considers
the issue of final policymaking authority. (ECF No. 112 at
PageID 1597.) In Praprotnik, the Supreme Court found
that St. Louis's City Charter established a Civil Service
Commission “[t]o consider and determine”
employment matters upon reference or appeal. 485 U.S. at 129.
The Charter provision relied on by the Supreme Court stated
that the Civil Service Commission had the power:

To consider and determine any matter involved in the
administration and enforcement of this [Civil Service]
article and the rules and ordinances adopted in accordance
therewith that may be referred to it for decision by the
director [of personnel], or on appeal by any appointing
authority, employee, or taxpayer of the city, from any act of
the director or of any appointing authority. The decision of
the commission in all such matters shall be final, subject,
however, to any right of action under any law of the state or
of the United States.

Praprotnik, 485 U.S. at 129 (insertions in original)
(quoting St. Louis City Charter, Art. XVIII, § 7(d)
(1988)). The Supreme Court concluded that the plaintiff had
not been terminated through operation of an official policy,
because, in light of the Civil Service Commission's
powers, the City Charter did not empower his immediate
supervisor or his department head to make final decisions.
Praprotnik, 485 U.S. at 129.

The
Memorandum of Understanding's grievance resolution
process differs significantly from the St. Louis City Charter
reviewed in Praprotnik and from the review boards
examined in other cases. Praprotnik, 485 U.S. at
129; see Meyers v. City of Cincinnati, 14 F.3d 1115,
1118 (6th Cir. 1994) (discussing powers of the Civil Service
Commission established under Ohio law). In this case, the
Memorandum does not empower any person or entity to
“consider and determine” issues. See
Praprotnik, 485 U.S. at 129. To the contrary, the
express goal of the Memorandum's grievance procedure is
“to reach an understanding” and to ensure that
“grievances [are] settled in an orderly, prompt and
equitable manner.” (Mem. of Understanding, Exhibit 43
at 35.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Memorandum of Understanding&#39;s grievance process is thus
not an appeal nor a determination, but rather a mechanism for
facilitating settlement between the labor union and MLGW.
(Mem. of Understanding, Exhibit 43 at 4.) Step 1 of the
grievance process is an &ldquo;oral discussion&rdquo; between
the employee and his supervisor &ldquo;to encourage a
cooperative and direct resolution of differences.&rdquo;
(Id. at 36.) The employee&#39;s supervisor is
required to give an oral answer at Step 1, but any resolution
at this phase is a &ldquo;settlement&rdquo; rather than a
determination or a finding. (Id.) At Step 2, the
employee provides a written grievance and then has a
&ldquo;meeting&rdquo; with his Department Head and other
members of management &ldquo;in an effort to settle the
grievance.&rdquo; (Id ...

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